What influences the impact of warning labels in decisions from description-plus-experience

Leonardo Weiss-Cohen, University College London, London, London, United Kingdom

Emmanouil Konstantinidis, University of New South Wales

Maarten Speekenbrink, University College London

Nigel Harvey, University College London, London, London, United Kingdom

Abstract

Warning labels can be considered as descriptions added to repeated
decisions-from-experience. Limited research so far has looked at the theoretical
integration of decisions from descriptions and decisions from experience when the
two are available concurrently. We explore how the presence and timing of such
warning labels influence behaviour. We expected the provision of warning labels
to subsequently reduce risk taking, and that more prior experience before the
appearance of such labels would lead to stronger habit formation and reduce their
behavioural impact. Instead, we show how the appearance of descriptions warning
against risks can have a perverse effect of increasing risk taking. And
counter-intuitively, we also observe that the amount of previous experience prior
to the appearance of descriptions does not impact behaviour. Briefly presented
warning labels also have the same effect as constantly present ones. All of these
findings have strong implications on the design of effective warning labels.